Integrated utility pricing and design of water-energy rural off-grid systems

Abstract This work addresses a multi-objective strategy for defining the relationships between design and utility policy prices in water-energy off-grid systems. Levelized cost of utility is introduced for valuating the price of power, heat and water supply in an isolated community from Mexico. Besides, levels of subsidies and impacts of social, energy and economic policies are considered for defining the utility price for the end user. Levelized cost of electricity has been used as a common metric for determining the economic impact of implementing energy systems in off-grid systems. Normally, it is defined as a fixed cost associated to energy utilities. However, it is possible to define levelized cost of utilities associated to the design of multi-product systems. The proposed methodology allows determining the levelized cost of utilities using a flat-tariff scheme, as it is used in most of literature, and according to the demand-generation dynamics. For testing these ideas, it is presented the design of a water-energy off-grid system consisting of combined heat and power units fed by natural gas and biogas. The water-energy surplus management is performed using pumping and battery systems. The optimal design considers the size and selection of units according with objective functions as minimizing total annual cost and land usage as well as maximizing the social opportunity of community. The utility cost influence over operational policy is defined by partial load and storage levels of the units. For reaching a trade-off between objective functions, it is used a utopia-tracking approach. Results show the suitable level of subsidies as well as the advantages of implementing dynamic levelized cost of utilities according with the behavior of the water-energy supply system.